CLINTON HEALTH PLAN TO SEEK MEDICARE DRUG-PRICE CONTROL by Robert Pear New York Times as printed by the San Jose Mercury News 9/10/93 WASHINGTON- The Clinton administration has told Congress that as part of the President's health-care plan, it wants the government to review prices of new prescription drugs so Medicare coverage can be denied for drugs whose prices are deemed excessive. Such a penalty would be a potent means of restraining drug prices, which increased more than twice as fast as other consumer prices in the past decade. The latest version of President Clinton's health plan also would require drug manufacturers to help finance a new prescription-drug benefit by providing a discount on all drugs covered by Medicare. White House documents say drug manufacturers would have to give such discounts to the government as a condition of participating in Medicare and Medicaid, the programs for the elderly and the poor, which together account for half of all prescription-drug sales. The purpose of this proposal is to make sure the Medicare program gets discounts like those now provided to Medicaid as well as to hospitals, health-maintenance organizations and mail-order pharmacies. If it holds, this provision may serve to temper the grumbling of the politically powerful senior citizens' lobby, which was angered earlier this week by the likelihood that major restrictions on Medicare spending would be used to fund the bulk of the reform package. If the White House insists on a stringent cap on Medicare spending, "the aging organizations may just say, 'The hell with it,' " and fight the entire plan, warned Lawrence Smedley, executive director of the National Council of Senior Citizens, which includes 5 million affiliated members in groups of union retirees and church clubs. Clinton must have enthusiastic support from this group to win approval of his health-care plan. In 1992, they were his most loyal voters. Administration officials estimated Thursday that $285 billion- of the plan's total $700 billion cost over five years- would be funded by savings from the caps on the Medicare, Medicaid and other publicly funded health programs. About $105 billion would come from new taxes on cigarettes, alcoholic beverages and some large corporations, they said. How realistic those and other administration estimates are- and how they will be received- will be the focus of heated debate over the coming months. Clinton will formally unveil the plan before a joint session of Congress on Sept. 22. Congressional Democratic leaders said they would begin hearings Sept. 28.